Sosandar reports first full year of profitability

11th Jul 2023 09:29

(Sharecast News) - Women's fashion brand Sosandar said in its full-year results on Tuesday that, despite challenging macroeconomic conditions, it achieved a strong financial performance with growth in both revenue and profitability.

The AIM-traded firm reported revenue growth of 44%, reaching £42.5m, as it made its first full year of profitability, with profit before tax standing at £1.6m.

Despite the increase in revenue through a lower-margin wholesale channel, Sosandar was able to maintain its gross margin at 56.1%, compared to 56% in the 2022 financial year.

The company ended the financial year with net cash of £10.6m on 31 March, on the back of strong trading as well as an oversubscribed fund raise in February.

Looking at the post-period trading highlights, Sosandar reported a strong start to the first quarter of the 2024 financial year, generating revenue of £11.4m, which was a 10% increase compared to the same period last year.

The impact of strategic initiatives was expected to become more evident in the second half of the year, the board said.

In line with its global expansion plans, Sosandar said it would be going live with Global-e in July, which would enable it to conduct transactions and fulfil orders worldwide.

As at 30 June, Sosandar's cash position totalled £10m, reflecting further investment in inventory and continued strong trading.

"We are delighted to report on what has been a transformational year for Sosandar," said co-chief executives Ali Hall and Julie Lavington in a joint statement.

"Despite the challenging macroeconomic backdrop, we have seen increasing demand for our products across all categories with strong trading across both Sosandar.com and through our third-party partners.

"The sustained growth in revenue and profitability throughout the period is testament to our ability to deliver a unique quality product offering and highly effective marketing strategy, that resonates with our customer base."

As Sosandar continued to grow, Hall and Lavington said the company was committed to investing in its product range to offer customers an "ever-growing variety" of "on-trend, affordable, long lasting, lifestyle appropriate" clothes.

"We are delighted to report that demand for our fast-tracked product range has continued to increase with knitwear, formal tailoring, coats, partywear, summer occasion wear and swim and beach wear all performing particularly well during the year.

"Our third-party partnerships continue to perform extremely well and we were delighted to become an omnichannel retailer through our partnership with Sainsbury's.

"The partnership will accelerate growth in our market share and the awareness of our brand as we provide our large but underserved demographic with more opportunities to purchase our unique and diverse products."

Sosandar was also excited that it would imminently have the ability to transact and fulfil orders worldwide through its agreement with Global-e, which was set to go live in July.

"The momentum built throughout the 2023 financial year has continued into 2024, with current trading in line with expectations.

"We are very excited for the opportunity available to us in FY24 and beyond as we deploy the money raised from our over-subscribed equity fundraise in January 2023 to support our growth both in the UK and internationally."

At 0901 BST, shares in Sosandar were down 4.63% at 24.08p.

Reporting by Josh White for Sharecast.com.